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Chinese Drywall Liability Bill Under Consideration in Louisiana

Jun 4, 2009 | Parker Waichman LLP

A Chinese drywall bill currently under consideration in the Louisiana legislature would require the businesses found responsible for the drywall debacle to foot the entire bill for damages sustained by Louisiana homeowners.  According to a report on wwltv.com, the  Louisiana state legislature is expected to take up the Chinese drywall bill sometime this morning.

Homeowners in at least 18 states have complained that fumes from Chinese-made drywall produce a “rotten eggs” odor and cause metals, such as air conditioning coils, to corrode. The fumes have also been associated with respiratory and sinus problems in some residents. According to a recent Wall Street Journal article, the U.S. imported roughly 309 million square feet of drywall from China during the housing boom from 2004 to 2007. In Louisiana, many homeowners who had to be rebuild following Hurricane Katrina have discovered that the tainted drywall was used in their homes.

Earlier this month, the Environmental Protection Agency (EPA) released results of tests it conducted that compared Chinese drywall to American-made material. The tests found sulfur and two organic compounds associated with acrylic paint in the Chinese drywall that were not present in the American wallboard. The agency said more testing is needed to determine if any of the compounds found in the Chinese drywall are responsible for problems reported by homeowners.

According to wwltv.com, the Louisiana Chinese drywall bill would allow homeowners to collect 100 percent of their damages, plus attorneys fees from either the manufacturer, distributor, or seller of the contaminated drywall.  Right now, state law only allows homeowners to be compensated partially by each, wwltv.com said.

The bill is supported by many homeowners in the state, as well as plaintiffs' attorneys. But many business advocates argue because the bill is retroactive, it could push many businesses into bankruptcy.  Others assert that it isn't fair to sue those companies who didn't know the materials they purchased from China were toxic, wwltv.com said.

But one plaintiffs' attorney who is representing 300 people in Chinese drywall lawsuits told wwltv.com that while the Chinese companies who made the drywall share most of the responsibility for the problem, others in supply chain are liable as well.

The Chinese drywall problem has spawned scores of lawsuits in both federal and state courts around the country. Late last month, the Judicial Panel on Multidistrict Litigation (JPML) in Louisville, KY heard oral arguments requesting that all pending Chinese drywall cases filed around the country be consolidated in a single jurisdiction.


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